Q: First of all, PacNet is recommending long term shareholders to reject the offer but short term investors to accept. Does that influence your strategy at all?
A: Well, the choice before Pacific Internet shareholders is a simple one. A very generous, risk-free cash offer of US$9.50 per share. The alternative is a five-year business plan with no details about market entry strategies, no details about investment and capital spending and no details about the competitive risks and regulatory risks. All of these amount to significant execution risks. I think the issue between short term and long term shareholders just confuses the issue.
Q: Ok. So it’s a simple choice you say for PacNet shareholders. You need 50% and one extra share. How confident are you that you are going to get it?
A: Well, we have a very generous offer on the table and I think we have to wait for shareholders to make a decision.
Q: Well, how close are you to getting those acceptances do you feel?
A: Well, we remain confident but in the business of a takeover, most of the decisions will be made by shareholders in the last 24 hours.
Q: Vantage owns 29% of Pacific Internet. It says the shares are worth US$15, so way beyond what you are actually offering. Have you been speaking to Vantage and have they given any indication they may come over to your side?
A: Well, I think the most important thing to note is that the Independent Financial Advisor to PacNet has indicated that the financial offer is fair to shareholders. We will have to wait Vantage Corp’s decision as a shareholder.
Q: Right. Have you actually been meeting them face-to-face or been on the phone?
A: Under the current takeover rules, once the tender offer has been made, the two parties are not supposed to meet.
Q: Ok. You say this is your final offer. Is that final-final or is there any chance it could go up, either if shareholders reject it or if another bidder comes in?
A: It is final in the absence of any competitive bid.
Q: Is there any sign out there that there may be a competitive bid?
A: Under that condition, then the rules that constrain our takeover offer, you know, will be different and we will be able to re-look at the situation.
Q: Ok. So there is potentially more money coming on the table. It just depends really whether anybody else comes in. How high are you prepared to go?
A: We will have to cross that bridge if events develop that way. But as of right now, there is no competitive alternative offer on the table. So therefore, the choice for Pacific Internet shareholders is a simple one.
Q: Ok. If you did need to raise your offer, have you got plenty of cash to do it? Would you have to go to the financial markets or what?
A: Well, as I indicated, we will cross that bridge when we come to it because I cannot speculate on the future.
Q: What are your plans if you do win? I mean how many seats do you want on the Board for starters?
A: Well, again, that is something that we will have to decide when the event develops. I think our immediate goal, if we are successful in combining the two companies, is to work on the fact that both businesses are complementary, our geographic presence is complementary. And together we should have better economies of scale in our network.
Q: So would you plan to de-list the Pacific Internet stock or would you in fact back your own company into Pacific Internet which has a Nasdaq listing?
A: Well, currently the offer that is being made is by MediaRing for Pacific Internet. So depending on the amount that we receive, if we are successful, we would have to consider our options going forward. But right now, I cannot answer specifically the question of what the future will hold in terms of listing.
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